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Friday, April 27, 2012

OFAC Subpoenas, Penalties and Voluntary Disclosures

At the Spring Meeting in New York City of the American Bar Association's Section of International Law, I presented a workshop on how to handle administrative subpoenas, investigations, and proposed penalties by the Office of Foreign Assets Control, U.S. Department of the Treasury. I also discussed how and when to submit a voluntary self-disclosure to the Office of Foreign Assets Control (OFAC).

Some practical advice provided during the workshop:

1. OFAC is very serious about its responsibilities regarding economic embargoes and sanctions so do not ignore any correspondence from OFAC, especially a subpoena.

2. OFAC regulations are complex so be sure to hire an attorney experienced with OFAC cases. Since OFAC regulations are Federal, you may hire an attorney anywhere in the United States. For example, your company may be located in Los Angeles, but you may hire an attorney in Miami.

3. Responding to an administrative subpoena should be done by your attorney, although an officer of the company should sign a declaration that all statements are true to the best of that officer's knowledge.

4. Your attorney should engage in conversation with the OFAC representative to get a better understanding of the investigation.

5. If an error, mistake, or serious violation is discovered by the company regarding one of its shipments (for example, an export to a country without the necessary license approval from OFAC), hire an attorney to do a prompt, internal investigation, and consider making a voluntary self-disclosure to OFAC.

6. Be absolutely sure the voluntary self-disclosure to OFAC contains all of the required information as set forth in the OFAC regulations in Title 31 of the Code of Federal Regulations, otherwise, there is a risk of it being rejected by OFAC.

7. Penalties by OFAC are $250,000 per violation, but a voluntary self-disclosure may result in no penalty at all or at least a much lower penalty.

Disclaimer

This commentary is informational only, is not legal advice and does not establish an attorney-client relationship. Views expressed are of the individual user and do not represent the views of GrayRobinson, P.A. its owners or its management. You should seek appropriate and properly licensed legal advice before making any decision based on these comments.